UK-EU short-straits volumes down by 20%

Britain’s road freight vehicle movements to the European union   via the key ‘short-straits’ Dover-Calais and Eurotunnel crossings remain almost a quarter below their levels last year, according to early to mid-March figures from Transporeon, one of Europe’s largest road logistics platforms, as companies continue to adjust to the new post-Brexit trade arrangements and changes related to the pandemic.

Figures from Transporeon and its truck telematics and transport management technology partner Sixfold – in which a significant portion of the monitored traffic crosses the Dover Strait – indicate that outbound road freight vehicle movements from the UK to the EU in the first two weeks of March stood at around 60% of their daily peak volume levels last year, compared with around 78% of daily peak volumes in the same two weeks of 2020. 

According to the Transporeon-Sixfold Brexit Market Monitor (BMM), those figures for 2021 have been broadly stable since the start of February. 

Analysis by Lloyd’s Loading List of those figures indicate that outbound road freight movements from the UK to the EU this year are down by almost one quarter (23%) compared with the same period last year – or at least on the key ‘short-straits’ crossing where most of the Sixfold-monitored traffic crosses.

Meanwhile, inbound volumes from the EU to the UK in the first two weeks of March appear to have stabilised at around 62% of their daily peak volume levels last year, compared with around 75% of daily peak volumes in the same two weeks of 2020 – equivalent to a drop of around 17% compared with the same period last year. 

Stabilising at this lower level

Transporeon noted: “The overall volume of border traffic on the corridors between the EU and the UK and the UK and the EU remains below the average of 2020. It appears to be stabilising at this level. One possible explanation for this lies in the overall weak economic development due to the pandemic, which probably also leads to a lower transport volume. In addition, there may also be Brexit-related hurdles in customs clearance to and from the UK.”

UK government figures indicated that UK-EU and EU-UK total road freight vehicle movements had recovered to around 96% by early February, but was still at only 82% on the Dover Strait – pointing towards a possible diversion of traffic that was formerly on the Dover Strait to other routes – for example, to unaccompanied EU-UK services on longer ferry routes.

A source at Sixfold acknowledged that these are all appeared to be plausible explanations, also adding one additional possibility – that Brexit had also led to changes in its data sources, for example if some companies had moved their focus to other markets.

However, the Sixfold-Transporeon data, like the UK government figures, are based on total road freight vehicle movements, including both loaded and empty trucks, and therefore fail to capture the reported increase in levels of empty trucks returning from the UK to the EU because of lower export volumes from the UK to EU markets since the UK’s withdrawal from the EU single market and customs union  

Higher rejection rates by carriers

However, Transporeon’s Transport Market Monitor (TMM) indicates that the “rejection rate” on EU corridors to the UK remains at a high level, with up 44% compared to the third quarter of 2020 on the corridor from France to UK, up 39% from Italy to the UK, and up 35% from Poland to the UK, although rejection rates fell slightly (-9%) on Germany-UK routes.

And although the “rejection rate” on the corridor from France to UK “remains at a seasonally higher level, with +44% compared to the third quarter of 2020”, that figure is falling compared to the previous month, the report noted.

Rejections refer to what percentage of the total transport orders were rejected by carriers on the Transporeon (TP) Platform, which automatically assigns transport orders from shippers to carriers on the platform, which carriers can then choose to reject. The number of these “rejections” rose sharply in the first weeks of 2021 for EU corridors to the UK. “Freight forwarders reject (the transport orders) for different reasons, for example, Brexit uncertainties, Covid etc.” a spokesperson explained.

Transporeon said this development towards a falling rejection rate this month “is typical for the current annual period, as less is transported at this time and therefore a lot of transport capacity is available on the spot market. It remains interesting to see whether, in view of the external shocks (Corona, Brexit) and the associated uncertainties in the European logistics market, the usual trend of rising transport volumes from Easter onwards will also be observed in 2021.” 

Meanwhile, on the pricing side, Transporeon’s Transport Market Monitor (TMM) noted that prices on the corridor from France to Great Britain “remain on an elevated level” (+15.7%) as of the second week of March, compared to March 2020, although compared to the previous month, prices are almost 11% lower (10.8%).

Eurotunnel freight down 24% 

As reported earlier this month, road freight volumes between the UK and mainland Europe carried via the Eurotunnel Le Shuttle Freight service remained down by almost one quarter last month, as the market continues to struggle to adjust to new post-Brexit administrative rules since 1 January.

In February 2021, Le Shuttle Freight transported 99,787 trucks, a decrease of 24% compared to February 2020, “in a market still marked by the adjustments to new post-Brexit administrative rules, but with a trend towards normalisation”, the service’s operating company noted. Combined volumes for the first two months of 2021 via Le Shuttle Freight are 31% below the equivalent months last year.

The company said it believed the compulsory requirement to present a negative Covid test, carried out on British soil less than 72 hours previously, for trucks entering France “remains the most restrictive provision for cross-Channel logistics chains”.

However, freight firms have also highlighted continuing challenges relating to the new post-Brexit administrative rules since 1 January as a key factor that has especially impacted groupage and parcels services, along with challenges for some products of plant of animal origins, with full truckload services said to be less problematic.

A survey by the British Chambers of Commerce carried out between 18 and 31 January 2021 indicated that almost half of UK exporters are facing difficulties in adapting to the changes in the trade of goods following the ratification of the UK-EU Trade and Cooperation Agreement (TCA) on 1 January 2021. The survey received 1,000 responses, mainly from SMEs. 

Analysis by Lloyd’s Loading List of the UK government’s own figures indicate that up to one in five UK road-borne exports were still not taking place in February, as traders continue to struggle with post-Brexit trade complications.

January 40% drop in UK exports to EU

The UK’s Office for National Statistics (ONS) last week published official figures highlighting the extent that UK-EU trade collapsed in January, including a more than 40% drop in UK exports to the EU, as traders and their freight and logistics providers adjusted to new post-Brexit trading arrangements and challenges related to the Covid-19 pandemic.

Freight and logistics providers say the fall in UK-EU import-export trade to some extent that was a response to pre-stocking in December in anticipation of difficulties this year, and the relatively new Covid testing regime for road freight drivers travelling ex-UK to France, some Covid-related issues on the demand side, as well as the difficulties to traders and logistics companies as a result of the new UK-EU trading arrangements.

Certain indicators suggest that the disruptions and fall in UK-EU import-export trade improved in February and March, although many sources report that there was still a deficit in February and March in UK-EU freight trade, particularly UK exports to the EU.

One European road freight operator told Lloyd’s Loading List: “It’s clear many traders are still not back to normal after Brexit and trade volumes – especially from the UK to the EU – are depressed by a combination of extra costs, longer transit times, extra customs procedures and SPS requirements at EU borders.”

They welcomed the recent decision by the UK government to delay the application of full controls to inbound shipments to the UK until October, but noted: “Whilst (that) announcement gives importers and transport companies more breathing space, it further risks widening the UK’s trade gap with the EU as it is currently much attractive to import to the UK than it is to export to the EU.”  

Pre-stocking ‘a red herring’

He said the explanation that UK volumes are reduced due to pre-stocking “is a red herring, because UK exports fell by 38%, YoY, whereas imports fell by 16%”.  

He also said it was difficult for anyone to say definitively or with any accuracy to what extent the proportion of empty trips has increased this year “because prior to this year, the contents of trucks weren’t reported as there were no Customs controls”.

But he highlighted that “Eurotunnel has very rarely operated at full capacity this year and I believe this week was the first time this year they’ve activated their capacity protection measures and that was due to storms in the Channel diverting trucks from ferries and not because of overall high demand. The big drop in trucks using the UK as a land-bridge from and to Ireland must also be affecting demand for cross-Channel capacity.”

Jason Breakwell, commercial director for Wallenborn Transports, noted: “We’ll need another two months of ONS data before we know if there is a structural problem.”